Analysing the Drivers of Services Firm Performance: Evidence for Ireland

Abstract

We examine drivers of firm performance using a holistic multivariate model which relates services firm growth to firm-characteristic, firm strategy and macroeconomic variables. Using data for 905 services firms in Ireland over the period 2001-2007, we employ System Generalised Method of Moments estimations and multiple firm performance measures to address the possible endogeneity and multidimensionality of firm-level performance. This paper provides empirical evidence on the factors determining services firm performance and the channels through which this occurs. Results confirm the importance of macroeconomic conditions for firm performance. We also find that small services firms in Ireland grew quicker during this period.